Remember Plato's cave?

            It was the one with the flickering shadows on the wall. The shadows were the closest any human being got to see anything real. I think that's how most of us have been affected by the last three years--- we don't know what's "real" anymore.

            This is particularly true of financial assets. Measures of common stocks--- like price to earnings ratio and price to book value--- have lost their meaning. Today we know "earnings" and "book value" are shadows projected through the hands of felonious accounting wizards.

            So let's step away from the shadows. Let's close our eyes. Let's fumble in the dark. Let's feel what's obdurately real. What comes to hand?


  • In 1970 there was no fiber-optic cable. Today, there are 39 million miles of it. Wave division multiplexing technology is multiplying its carrying capacity faster than Moores' Law doubles computer capability. This is the Mother of All Pipelines. Today's financial disaster will be tomorrows' miracle.
  • In 1970 there were no websites. The worldwide web did not exist. Today there are over 30 million websites. Mine is one of them,
  • In 1970 personal computing didn't exist. Today nearly 60 percent of all households have computers.
  • In 1970 there were no cellular towers. Today there are over 100,000. Overhead, 700 satellites circle us.
  • In 1970 there was one ATM terminal. Today there are 273,000.
  • In 1970 some 67,700 patents were issued. In 2000 the Patent Office issued 175,000.
  • In 1970 there were only 33 population centers with at least one million people. Today there are 50.


Add up all this stuff--- economists call it capital stock--- and it comes to about $105,000 for each person in the United States. That's two and a half times what we had in 1950.

            None of this would mean much if our lives were nasty and short. In fact, our lives are safer, longer, and a closer to realizing the potential of every citizen.

  • In the five years ending in 1970 airline crashes took 145 lives. In the corresponding period ending 2000, airline crashes took 90 lives--- even though air travel had grown 6-fold. Today it's 10 times safer to fly than it was in 1970. Flying is now 100 times safer than driving in spite of the fact that automobile fatalities are only 30 percent of what they were 30 years ago.[v]
  • Life expectancy is rising as death rates fall. From 1935 to 2000 life expectancy at 65 rose from 12.6 years to 17.6 years. During that period, work related deaths plummeted and accidental deaths at home were cut in half. Today, the fastest growing population group is Americans over 100 years of age.
  • In 1970 only 11 percent of us had college educations. Today, 25.6 percent of us have an undergraduate degree. The number of Master's degrees has nearly doubled while doctoral degrees have risen by 50 percent.


Compulsive optimism? I don't think so. These figures and more come from the Dallas Federal Reserve Bank's examination of The Real Stuff. You can download it for yourself at: